On Tuesday, Jim Cramer, the host of Mad Money, emphasized yet again how much diversification can help an investor.
“The AI horse race consumes us. We know that there’s a lot on the line for NVIDIA or AMD every day, but how about if your portfolio is diversified? What if you’re in a five-stock portfolio plus an S&P 500 index fund with those five stocks being diversified into separate growth silos, as I suggest in How to Make Money in Any Market? The answer, you’d feel the AI horse race in one of your stocks for certain, but not all of them… Anything in tech could be hit, which is why you diversify your holdings across five different sectors, meaning only one tech. What to do with the rest?”
READ ALSO: Latest Jim Cramer Comments on These 12 Stocks and 14 Stocks Jim Cramer Recently Shed Light On.
Cramer then walked through what the remaining four holdings should look like. He said they must still represent growth, and he pointed to areas like healthcare, aerospace, restaurants, and retail as examples. He explained that growth names tend to hold up across different market environments and can get an extra lift when interest rates fall. He added that the Federal Reserve is now widely expected to continue cutting rates at the December meeting. He said it is a view that became stronger after a soft batch of economic data was released that morning.
“After this… set of numbers that I saw this morning, I think we’re pretty darn close to the scenario where Fed Chief Jay Powell has no choice but to recommend a rate cut. In other words, it won’t even be an issue… Now, there are… all sorts of growth areas out there that are working, including travel and leisure, life sciences, or aerospace. There are plenty of opportunities. You heard Agilent earlier. So stop wallowing in just tech. Pick four stocks that aren’t tech and have a very good day.”
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on November 25. We listed the stocks in the order that Cramer mentioned them. We also provided hedge fund sentiment for each stock as of the second quarter of 2025, which was taken from Insider Monkey’s database of over 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Jim Cramer Discussed 7 Stocks and the Need for Diversification
7. Texas Roadhouse, Inc. (NASDAQ:TXRH)
Number of Hedge Fund Holders: 39
Texas Roadhouse, Inc. (NASDAQ:TXRH) is one of the stocks Jim Cramer discussed, along with the need for diversification. Cramer highlighted tariff cuts on Brazilian beef and their impact on the stock, as he said:
“Restaurants intrigued me now that we’re seeing commodity prices getting hit. I’m particularly partial to any chain that’s been willing to sacrifice margins to keep customers coming. You know what that means? It means Brinker, symbol EAT, parent of Chili’s, and investing club holding Texas Roadhouse. Wow. The latter’s more levered to steak than any other chain, and its sales have held up because of its refusal to take price hikes lest it alienate its core customer. So now that steak prices are coming down because the president has cut the tariffs on Brazilian beef, Texas Roadhouse should see its gross margins explode. And I don’t care that it’s up about 10 straight points.”
Texas Roadhouse, Inc. (NASDAQ:TXRH) runs and franchises casual dining restaurants under the Texas Roadhouse, Bubba’s 33, and Jaggers brands.
6. Best Buy Co., Inc. (NYSE:BBY)
Number of Hedge Fund Holders: 44
Best Buy Co., Inc. (NYSE:BBY) is one of the stocks Jim Cramer discussed, along with the need for diversification. Cramer mentioned the stock during the episode and said, “I hope you enjoyed Best Buy as much as I did. That one’s suddenly pretty interesting.”
Best Buy Co., Inc. (NYSE:BBY) sells technology products, electronics, appliances, and entertainment items, along with related services like delivery, installation, and technical support. Cramer mentioned the stock during the November 21 episode and commented:
“We have a slew of important earnings on Tuesday from a host of industries. In the morning, for example, we get results from Kohl’s, Best Buy, and DICK’S Sporting Goods. What am I hearing?… Best Buy will be okay. Probably hurt by higher interest rates and tariffs, although that should be offset by a PC refresh cycle.”
Additionally, Cramer talked about Best Buy Co., Inc. (NYSE:BBY) in detail during the September 30 episode and said:
“Now, I wrote How to Make Money in Any Market over a period of two years. In the chapter on dividend stocks, I initially included Stanley Black & Decker and Best Buy as interesting prospects. Now, I think both of these are well-run companies, and they yield 4.5 and 5%, respectively. I took them out, though in the next pass, because unlike the food stocks, which really don’t even need a strong economy to make big money, Best Buy and Stanley Black & Decker actually need strong consumer growth and tariff relief.
That’s just too much of a lift for me. Now, I wouldn’t be surprised if one of these stocks I just mentioned ends up making me look bad and becomes a good stock. I know this because you see, we bought both Stanley and Best Buy for my Charitable Trust, and we were shocked to see them shoot higher immediately on word of rate cuts. We sold a big chunk of those positions up higher, but then subsequently got rid of the rest at just okay prices because we were worried. In retrospect, we got lucky, I think, on the higher prices because I believe that those rallies were simply short squeezes. We definitely aren’t going back into either of those two anytime soon.”
5. DICK’S Sporting Goods, Inc. (NYSE:DKS)
Number of Hedge Fund Holders: 55
DICK’S Sporting Goods, Inc. (NYSE:DKS) is one of the stocks Jim Cramer discussed, along with the need for diversification. Cramer was bullish on the stock after the company’s recent strategic moves, as he remarked:
“I like DICK’S Sporting Goods after they cut margins, removed all the rest of that bad inventory from Footlocker, which they bought earlier in the year.”
DICK’S Sporting Goods, Inc. (NYSE:DKS) sells sporting goods, fitness equipment, apparel, footwear, and similar accessories. Cramer showed a positive sentiment toward the company’s acquisition of Foot Locker during the November 21 episode, as he stated:
“We have a slew of important earnings on Tuesday from a host of industries. In the morning, for example, we get results from Kohl’s, Best Buy, and DICK’S Sporting Goods. What am I hearing?… That DICK’S could be insanely good because it bought Foot Locker low and now’s the right Nikes to go with the New Balance, the Hoka, and the ON. That’s the right lineup.”
4. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 105
Walmart Inc. (NYSE:WMT) is one of the stocks Jim Cramer discussed, along with the need for diversification. Cramer seemed positive on the stock after its quarter, as he stated, “Walmart still looks good after that great quarter last week.”
Walmart Inc. (NYSE:WMT) operates retail stores, warehouse clubs, and online platforms that sell groceries, everyday essentials, home goods, apparel, electronics, and more. During the November 20 episode, Cramer said that the company is among the “best in the business.” The Mad Money host commented:
“This stock was already one of the best performers in the group, but its valuation got a little stretched, trading around 40 times earnings, and longtime CEO Doug McMillon plans to retire, pass the baton to the head of Walmart US in February. Turns out there was nothing to worry about at all. When Walmart reported this morning, it blew away the numbers… When you put it all together, it’s no wonder the world’s largest retailer saw its stock surge more than 6% today, although it was actually down at one point in the early morning, making it the best-performing in the S&P 500.
Every part of the business, US International, Sam’s Club, performing well. E-commerce continues to grow like a weed. And Walmart’s somehow finding ways to bring in more high-income consumers and take care of the lower-income shoppers to boot. Thoughtful. Oh, and a surprising development, Walmart, after thorough discussion with the board that Doug McMillon initiated, is moving over to the Nasdaq.
Here’s the bottom line: Walmart stock still looks expensive on an earnings basis, but on days like today, you can see why so many investors are willing to pay up for it. At the end of the day, investors are willing to pay a premium for quality, and Walmart’s among the best in the business. This is one you have to hope will come down in a broader market sell-off. I don’t know if there’s any other way to get it at a discount.”
3. The TJX Companies, Inc. (NYSE:TJX)
Number of Hedge Fund Holders: 73
The TJX Companies, Inc. (NYSE:TJX) is one of the stocks Jim Cramer discussed, along with the need for diversification. Cramer noted that his team likes the stock for the Charitable Trust, as he commented:
“Then there’s retail. Well, we like TJX and Costco for the Charitable Trust. Those are two growth retailers with excellent numbers. TJX is at its highest, tremendous momentum. Costco’s not far from its low amazingly. And while it’s never cheap, I think this is a terrific moment to buy it.”
The TJX Companies, Inc. (NYSE:TJX) sells off-price apparel, footwear, accessories, and home goods. The company provides a diverse range of merchandise from clothing and beauty items to furniture, decor, kitchenware, and seasonal products. During the November 20 episode, Cramer noted that the company “thrives when the rest of retail’s in trouble.” He said:
“Finally, we got this really strong quarter from TJX… It’s another name we own for the Charitable Trust. This one’s very different from the other retailers that reported this week because TJX is the leading off-price chain. They’re playing a different game than regular retailers…
This company thrives when the rest of retail’s in trouble, one reason why TJX is up more than 20% for the year, while these other three companies are all in the red. Sure enough, this time, TJX reported a clean top and bottom line beat, 5% same-store sales growth when the analysts were looking for 3.7%. That’s a nice beat, 3.7 goes to 5. While TJX issued slightly weaker-than-expected guidance for earnings and same-store sales in the current quarter, that’s par for the course, people…
Again, when the rest of retail’s in trouble, TJX makes out like a bandit. The one thing about TJX is that its stock tends to either sell off or do nothing after the company reports, even when the numbers are good. We actually raised our price target on this one for the Charitable Trust yesterday. Even if the stock finished the day up less than 0.2%, it rallied another 1.6% today despite the terrible tape. I still think it’s a steal.”
2. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 95
Johnson & Johnson (NYSE:JNJ) is one of the stocks Jim Cramer discussed, along with the need for diversification. Cramer highlighted that he is fond of the stock, as he said:
“You could own JNJ and Merck with their incredible franchises. You know what? I’m actually particularly fond of JNJ right now. They’re spinning off their commoditized artificial joint business.”
Johnson & Johnson (NYSE:JNJ) develops and sells healthcare products, including pharmaceuticals and medical technologies, with treatments in immunology, oncology, neuroscience, cardiovascular care, and infectious diseases. In addition, the company provides surgical systems, orthopaedic solutions, cardiovascular devices, and vision care products. Cramer noted that the company is getting out of “everything non-proprietary” during the November 11 episode, as he remarked:
“If you want to venture beyond what we call the CPG, consumer packaged goods, world, I think you’d do very well with owning J&J or Amgen… J&J’s getting out of everything non-proprietary, artificial joints for example, and really bearing down on high-growth pharma with cancer being a specialty… They both have yields, more than 2.7%. How strongly do I feel about these former safety stocks? We have a monthly investment club meeting on Thursday, and I’ve told Jeff Marks, my co-portfolio manager, that we at least have to put one of these names in the bullpen. I don’t want to wait to look back and say, how did we miss that bottom?”
1. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 119
Eli Lilly and Company (NYSE:LLY) is one of the stocks Jim Cramer discussed, along with the need for diversification. Cramer spoke highly of the company’s GLP-1 medication, as he commented:
“I also own Eli Lilly, too, so I can handle that pain. Lilly may have the greatest drug franchise of all time with this GLP-1 weight loss and diabetes medication. Might also be a great treatment for hypertension, even alcoholism.”
Eli Lilly and Company (NYSE:LLY) develops and markets medicines for diabetes, obesity, oncology, immunology, neuroscience, and other chronic conditions. Cramer highlighted the company’s weight loss drugs and its plans during the November 10 episode, as he stated:
“… Eli Lilly, which I think has beaten back Danish Novo Nordisk, maybe even into submission. After all, Lilly’s on the market with a very effective once-a-week shot, but more important, it’s soon going to have a pill version. It could be gigantic. People hate shots. No wonder Lilly’s stock vaulted nearly 5% today, on the verge of becoming… the first non-tech stock to cross into the $1 trillion circle besides Berkshire Hathaway. But I say not so fast. As much as I like Lilly for the Charitable Trust, where it’s a very big position and we’re not a seller, I’m mindful that you can’t take anything for granted in this business… Lilly’s spending a fortune to develop a pill form of the drug that you can take every day like any other medication, and that could be more popular than any shot. You’re much more likely to stick with a pill than an injection. Plus, one of the biggest drawbacks of the current GLP-1s is that they cause you to lose fat and muscle in equal measure. These drugs make you thin, but they make you weaker. However, Lilly’s working on a shot that’s more targeted. It will attack fat to muscle at a 3:1 ratio.”
While we acknowledge the potential of Eli Lilly and Company (NYSE:LLY) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than LLY and that has 100x upside potential, check out our report about this cheapest AI stock.
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